Purchasing a condo new will have differences in the complexity of purchase agreements, closing processes, and warranty programs when compared to purchasing a re-sale condo or newly constructed house.
Differences from Purchasing a Re-Sale Condominium:
- A New Condominium Construction Contract is typically lengthier and more complicated than a re-sale Purchase Contract;
- The New Condominium Construction Contract will deal with additional items, such as delays in construction and possession dates, extra charges, new home warranty, most of which terms are weighted in favour of the builder;
- Due to the complexity, we would strongly advise that you review the contract with your lawyer prior to signing, or if you need to sign prior to reviewing with your lawyer, that you insert a clause indicating that your offer is conditional upon review and approval by our lawyer
Closing Date Issues
- Most builder contracts allow the builder to extend your closing date due to strikes, shortages of labour or materials or other reasons;
- Normally, a closing date delay would allow cancellation of the contract but with New Condominium Construction Contracts, buyers waive this protection;
- Be prepared for adjustments to your closing date and moving date, by ensuring that you have a residence to live if the possession date is delayed as well as arrangements for the storage of your possessions if you have made commitments to move out of your existing residence.
Deposit Protection and New Home Warranty
- In Alberta, all newly constructed homes and condominiums must be enrolled in a New Home Warranty Program;
- The Warranty Programs protects buyers from defective or incomplete workmanship, loss of deposits and unauthorized substitution of materials.
Differences from Purchasing a Newly Constructed House:
- Unlike closing a transaction for a newly constructed house, the builder’s lawyer is unable to release any funds for the purchase of the condominium to the builder until title to the condominium unit is transferred to the buyer. This means that approximately 2-3 weeks prior to the closing date, the buyer’s lawyer will have to submit the Transfer of Land and Mortgage to the Land Titles Office for registration;
- Typically, for the purchase of a newly constructed house, the buyer could meet with their lawyer as late as a week prior to the closing date. When purchasing a newly constructed condo, the buyer would have to meet with their lawyer approximately 3 weeks prior to the closing date to sign documents;
- When purchasing a newly constucted condominium, it is important to keep these timelines in mind to ensure timely registration at the Land Titles Office and to avoid potentially steep late interest payments to the builder.
We recommend seeking the advice of a lawyer prior to the signing of real estate contract for a new home or condominium to discuss these issues.
If you need assistance or more information regarding the purchase or sale of a home, or for the re-financing of your existing home, we welcome you to contact our office at 780-469-0494 or email us directly at firstname.lastname@example.org.